With the already increasing rates and the speculation that rates will continue to increase throughout 2014 there will be an effect on housing. The question becomes how much. We expect a minimal effect resulting in the higher interest rates but nothing that will drastically affect housing. The problem becomes the fact that the higher home prices increase and the higher the mortgage interest rates increase the less purchasing power buyers have and the less they qualify for.
300,000 loan amount at 4.75% interest rate= $1,565
300,000 loan amount at 5.75% interest rate = $1,750
*That is an increase of $185 per month
Let’s assume that a buyer is buying at the maximum they qualify for and was quoted a rate of 4.75%. That buyer was told that the principle and interest portion can’t exceed $1,565 per month in order to obtain financing. If rates increase 1% and are now at 5.75% than the buyer will qualify for approx 32,000 less than he did when the rates were at 4.75%. The reason for that is because there is more interest that takes up more of the $1,565 a month the buyer is qualified for.
Every company has some sort of focus and way of doing things that takes up a lot of their attention. At Performance Residential Realty Corp we believe in customer service.
More specifically for our buyers we do our very best every time to get a customer into a home they want to see immediately. We feel it’s important to always be available for our customers and do everything in our power to confirm an appointment. Sometimes that means moving the day around, picking up a key at an inconvenient location, and being persistent in calling, texting, and emailing agents and sellers .
We know that our buyer’s schedules are sometimes limited and while it may be more convenient for us to postpone an appointment at a time that may work better for us we know that doesn’t help our customers. We believe in going the extra effort since any home could be our customers perfect home and the quicker they see it the better opportunity securing an accepted offer.